Pepkor is to acquire the Legit, Swagga, Style and Boardmans businesses from privately owned retail group Retailability, it said on Tuesday.
Retailability offers apparel and lifestyle products across a number of retail brands in southern Africa. The businesses to be acquired operate 462 stores across SA, Botswana, Lesotho, Namibia and Eswatini, Pepkor said in a statement.
The Edgars, Edgars Beauty, Red Square, Kelso and Keedo businesses are not included in the transaction and will continue to be operated by Retailability, it said.
The acquisition is subject to regulatory and commercial suspensive conditions customary for a transaction of this nature.
Pepkor has previously stated its intention to expand its market share in adultwear through organic and acquisitive growth strategies. It said that that was based on the group’s underindexed market position in adultwear categories compared to its dominance in babies’, children’s and school wear.
The launch of the new Ayana womenswear brand in 32 stores at the end of February and recent acquisition of Choice Clothing were further examples of Pepkor’s adultwear growth strategy, it said.
The acquired businesses would be incorporated into the Pepkor Speciality business unit, which provides a range of adult apparel, footwear and accessories across seven retail brands, including Tekkie Town, Shoe City, Dunns, Refinery, CODE, SPCC and Ayana.
Pepkor Speciality’s total store base comprises 941 stores across SA, Botswana, Lesotho, Namibia and Eswatini.
“The proposed transaction will add significant additional scale to Pepkor Speciality and expand its product offering in the adult market, especially in womenswear through the Legit brand,” Pepkor said.
The acquisition of Swagga and Style had strong synergistic benefits, expanding the group’s store portfolio and providing the opportunity to further grow the group’s share in the adult wear market, Pepkor said.
The Boardmans online brand, which operates in the homeware product segment, will become part of the Pepkor Lifestyle business. Pepkor will unlock value through its extensive scale in sourcing, supply chain and back-office functions, in addition to leveraging its capabilities in credit and other financial services.
Tyrone Vieira, CEO of Pepkor Emerging Businesses, said the Legit and other Retailability businesses were a natural fit for Pepkor Speciality.
Pepkor COO Sean Cardinaal said the acquisition of these businesses “represents a major milestone in the execution of Pepkor’s strategic growth model by accelerating growth in the group’s Traditional Retail core. This, in turn, will enable strategies in our other growth pillars of Financial Services and Connectivity, Omnichannel, and Leverage & Efficiency — contributing to Pepkor’s delivery of compelling and sustainable long-term performance and returns.”
The total purchase consideration, to be settled in cash, was not disclosed, but Pepkor said it represented less than 2% of its market capitalisation.
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